Is This The New Trend At Western Digital Corp (NASDAQ:WDC)?


Just before releasing results for its last quarter, F4Q2016, Western Digital Corp (NASDAQ:WDC) boosted its earnings expectations for the quarter. The company went on to beat its own internal guidance. In the latest development, the company has again raised its earnings forecast for the current quarter nearly a month before it reports the results.

What’s the new target?

Western Digital Corp (NASDAQ:WDC) is now looking for F1Q2017 revenue in the band of $4.45 to $4.55 billion. The previous guidance called for revenue of $4.4 to $4.5 billion. As for the bottom-line, the company now sees F1Q EPS in the range of $1 to $1.05. It was originally looking for EPS in the band of $0.85 to $0.90.

What’s the adjustment based on? The company says that the acquisition of SanDisk has not only improved its product mix, but also brought in more customers. The company is also enjoying improved pricing, which is why it is expecting bottom-line improvement.

The actual reporting of F1Q results will be on Oct. 26 or around that date.

What transpired in F4Q?

Western Digital Corp (NASDAQ:WDC) posted revenue of $3.50 billion in F4Q, which rose 9.5% and outpaced the consensus estimate of $3.44 billion. However, higher costs associated with swallowing of SanDisk pushed the company into the red, leading it to post EPS loss of $1.34. However, adjusted EPS profit came in at $0.79, narrower than $1.51 a year ago, but still better than the consensus estimate of $0.71.

WDC had lifted its earnings expectations for the quarter before releasing the actual results to adjusted EPS profit of $0.72 on revenue of $3.46 billion.

WDC seems to be getting into the practice of providing conservative guidance, which it can easily lift as actual reporting approaches.

$19 billion acquisition – Western Digital Corp (NASDAQ:WDC)

Western Digital Corp (NASDAQ:WDC) is in the process of integrating SanDisk into its business system. It forked $19 billion to bring SanDisk under its armpit in a deal that closed in May.


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